Exam 10: Measuring and Managing Translation and Transaction Exposure

U.S.borrowing rate for 1 year = 9.5% U.S.deposit rate for 1 year = 8.7% French borrowing rate for 1 year = 11.3% French deposit rate for 1 year = 10.2% French franc spot quote = $0.1763-78 French franc 1-year forward quote = $0.1729-47 -What value can Alcoa lock in for a receivable of FF 3 million due in one year if it executes a money market hedge today?

(Multiple Choice)

4.9/5

(36)

Question 41

Hedging cannot provide protection against ________ exchange rate changes.

(Multiple Choice)

4.8/5

(42)

Question 42

Under FASB 52,most financial statements must be translated using the

(Multiple Choice)

4.8/5

(39)

Question 43

If you fear the dollar will rise against the French euro,with a resulting adverse change in the dollar value of the equity of your French subsidiary,you can hedge by

(Multiple Choice)

4.9/5

(39)

Question 44

One argument that favors centralization of foreign risk management is the ability to take advantage of the portfolio effect through ________.

(Multiple Choice)

4.7/5

(38)

Question 45

Showing 41 - 45 of 45

Hedging cannot provide protection against ________ exchange rate changes.

Under FASB 52,most financial statements must be translated using the

If you fear the dollar will rise against the French euro,with a resulting adverse change in the dollar value of the equity of your French subsidiary,you can hedge by

One argument that favors centralization of foreign risk management is the ability to take advantage of the portfolio effect through ________.

Introduction

The Determination of Exchange Rates

The International Monetary System

Parity Conditions in International Finance and Currency Forecasting

The Balance of Payments and International Economic Linkages

Country Risk Analysis

The Foreign Exchange Market

Currency Futures and Options Markets

Swaps and Interest Rate Derivatives

Measuring and Managing Economic Exposure

International Financing and National Capital Markets

Functions of Euromarkets

The Cost of Capital for Foreign Investments

Examining International Portfolio Investing

Corporate Strategy and Foreign Direct Investment

Capital Budgeting for the Multinational Corporation

Financing Foreign Trade

Current Asset Management and Short-Term Financing

Managing the Multinational Financial System

Filters